The Saudi Railways Organisation (SRO) has postponed the decision on the contract award for phase two of the $7bn Haramain high-speed railway until the middle of October.

The award was expected in the summer.

Phase two covers the design and construction of the track, signalling, telecommunications, electrification and the building an operational control centre for the railway. Phase two also covers the procurement and maintenance of the trains and involves building 25 rail bridges, 157 crossings, including wadi bridges and culverts, and 70 crossings for cars and camels in Mecca and Medina.

On 3 July 2010, the SRO received two bids for the contract from the Spanish consortium led by the local Al-Shoula Group and the French consortium led by the local Al-Rajhi Holding, which comprises Alstom, SNCF and Orascom.

The Al-Shoula consortium consists of Talgo, Indra, OHL, Dimetronic, Renfe and Adif.

Sources close to this group believe that diplomatic pressure being applied by French President Nicolas Sarkozy in favour of the French-based rival consortium is interfering with the award of the contract.

Both bids are said to be similar in terms of their technical score, but the Spanish bid is thought to be competitive on price. The longer the award is delayed, the more the Spanish bidding consortium believes Sarkozy’s diplomatic efforts are interfering. Senior representatives from the Spanish government have made several visits to Saudi Arabia.

In February, the SRO awarded two contracts for the construction of four passenger stations to Saudi Binladin Group and Saudi Oger (MEED 1:2:11). This is package two of phase one.

Package one of phase one, which involves civil works, roadway excavation, the body of the track and building bridges and culverts, is already under way.